March 6, 2013UncategorizedComments Off on It’s official: a drought in the Upper North Island

Report from BusinessDesk
Primary Industries Minister Nathan Guy has extended the official drought areas across the upper North Island, meaning government support programmes can be rolled out to those areas. A state of drought has been officially declared in South Auckland, Waikato, Bay of Plenty and Hawkes Bay. That covers Auckland Council area south of the Harbour Bridge, all of Waikato Bay of Plenty and Hawkes Bay Regional Council areas, and joins Northland. The decision was made after consultations with communities and an assessment was taken by the Ministry for Primary Industries.

“The declaration of a medium-scale event means that extra government funding will now be available to rural support trusts,” Guy said. “The entire North Island is dry and I am keeping a close eye on other parts of the East Coast, as well as Wairarapa, Manawatu, and Taranaki.”

The drought is expected to reduce New Zealand’s dairy production this season, and was seen as the main cause for a 10 percent jump in dairy prices sold on Fonterra Cooperative Group’s online auction site today.

Guy said Work and Income will offer rural assistance payments, which is the equivalent of the unemployment benefit, to people in extreme hardship.

Press Release – Federated Farmers
The declaration of a medium scale adverse event drought declaration will provide some relief for upper North Island Farmers who have been waiting in vain for rain, Federated Farmers Waikato provincial president James Houghton says.

“After an official drought was declared in Northland last week, we were pretty hopeful the Primary Industries Minister, Nathan Guy, would see we have a very similar situation in much of the central and upper North Island,” Mr Houghton said.

“All the Federation’s representatives for the Auckland, Waikato, Bay of Plenty, Rotorua/Taupo Hauraki/Coromandel and Hawkes Bay provinces are very pleased that the Minister for Primary Industries has declared official drought for our respective regions.

“This extended period of hot and dry weather over the last couple of months has left dairy and sheep and beef farmers alike with parched paddocks and burnt and stunted feed crops.

“Most farmers have been either feeding out supplementary feeds or de-stocking, but the situation has become critical as supplies dwindle and farmers are being forced to sell valuable capital stock.

“The moisture deficit is so high in many places that even if it started raining tonight, it could be about four weeks before grass recovers enough for stock to graze on.

“While the drought declaration does open access to Rural Assistance Payments (RAP’s), only cases of extreme hardship are eligible for these benefits. In the widespread 2010/11 drought, less than 100 of several thousand affected farmers received these payments, nationally.

“Anyone who thinks drought declarations are a licence for farmers to tap into government money is dreaming; this is not about hand-outs. Official drought declarations allow organisations such as the Rural Support Trust to expand on their farm advisory and counselling services, which are more vital than ever in these highly stressful times.

“It also allows the Inland Revenue Department to consider some more flexible tax repayments, which could help struggling businesses. To find out more about whether the Farmers’ Income Equalisation scheme is appropriate, farmers should talk to their accountants.
“Federated Farmers has activated its 0800 DROUGHT (0800 376 844) feed line, matching those who need feed with those who have some to spare. We will also be developing other formal and informal initiatives for farmers, their staff and their families.

“Farmers also need to talk openly with their bank’s rural manager. Some banks have already announced their willingness to work with farmers to get through this drought, but to really help they need to be kept fully informed of the situation.

“The situation this time is made worse by the drought being so widespread. In the 2008 drought other North Island regions were doing quite well, which gave us more options in terms of selling stock and buying feed. This year we are having to look to the South Island, and it is getting pretty dry down there too.

“We need the official declaration because it sets in motion the support services farmers need in these extreme weather situations,” Mr Houghton concluded.What an adverse event drought declaration means

For farmers, a medium scale adverse event drought declaration recognises a climatic situation has gone beyond individual farmers’ control and the hardship they face is not their fault.

Rural Support Trusts can coordinate and deliver farm advisory and counselling services. This advice is invaluable to aid business recovery and to help individual families cope with the stresses caused.

A declaration also triggers discretion from Inland Revenue on things like Income Equalisation. This allows Inland Revenue to accept later deposits to the income equalisation scheme. This needs to be arranged by farm accountants.

Any declaration formally confirms to the banks how bad things are. The Federation recommends farmers speak to their rural managers. Keeping the banks fully informed means they will work with you. We also note that some banks are deploying ‘drought packages’ and we will be collating these next week.

While there are benefits called Rural Assistance Payments, or RAP’s, in reality very few farmers will qualify as these are strictly administered for genuine hardship.

Federated Farmers does believe support from the Ministry for Social Development and Inland Revenue may prove beneficial to farm workers and their families, as the financial effect of drought cascades throughout our farming communities.

This is available to all farmers not just members while Federated Farmers Grain & Seed Industry Group has identified stocks of grains and straw in the South Island and is in discussion with Canterbury based feed manufacturers.

The Federation will also develop other formal and informal initiatives to help farmers, their staff and their families.

Also, industry good bodies such as DairyNZ and Beef+Lamb New Zealand are able to provide on-farm advice and guidance to affected farmers.